Tuesday, June 24, 2008

U.S. Sugar Getting Out Of Sugar Business


Sugar Selling 187,000 Acres And Company To State For $1.75 Billion

CLEWISTON, FL. --  187,000 acres of agricultural land is expected to be sold the the State of Florida and South Florida Water Management District by U.S. Sugar Corp.  This would vitually wipe out the country's largest sugar cane grower's stock of land south of  Lake Okeechobee. Although at a very attractive price to U.S. Sugar of about $9000 per acre.

The largest company and main industry in Hendry county, U.S. Sugar is said to have been negotiating secretly for seven months for the sale.  It is unknown what immediate effect of one of the largest land sales in Florida history may bring. U.S. Sugar has 1,700 employees, down from 2,100 in 2006. It's large sugar refinery and mill is located in Clewiston. The sale would take the land off the Hendry county property tax rolls.
 
Sugar also owns Southern Gardens Citrus in mid-Hendry county  and 33,000 acres of citrus groves, and a short line railroad in Clewiston to haul cane and related products. It earns about $400,000,000 yearly from sugar cane production. The sales price of $1.7 billion seems to be a capitalized number based on about a 25% gross revenue stream from the cane.

Governor Crist's office said of the sale Tuesday at a press conference in Palm Beach County, "The proposed agreement between the South Florida Water Management District and the United States Sugar Corporation involves the public purchase of nearly 300 square miles spanning four counties in South Florida – a land mass as large as New York City. The District will also take ownership of the company's assets, including 200 miles of railroad, a state-of-the-art sugar mill, sugar refinery and citrus processing plant. Subject to independent appraisals and approval by the District's Governing Board, water managers will invest $1.75 billion in cash and certificates of participation to finance the acquisition."

Chief Executive Robert Buker reportedly estimated the worth of the company's land and other assets, including its sugar mill and refinery, at more than $2.5 billion, so the sale is at about 70% of the company's asset value. It is unclear if the government intends to get into the sugar refinery business or if this may be a scheme where U.S. Sugar can lease back the operation and benefit somehow by the generous sugar subsidy payments made annually to them by the Federal government.

It may take about five years to complete the entire sale in stages, with the water management district paying the bulk of the funds. The district recently announced it was halting work on a 26-square-mile reservoir near South Bay to be part of the Everglades restoration plans in the area. Not including this purchase, State and Federal government has spent over $7 billion on Everglades reconstruction so far.

This is the largest Florida conservation purchase of private land in history.  The land is larger the the entire county of Pinellas. U.S. Sugar two years ago, hired a firm headed by Brian Ballard, who was a top campaign adviser to Charlie Crist in 2006.

Rep. Mahoney Responds To Sale

Following the announcement that the State of Florida and South Florida Water Management District have reached a $1.7 billion deal to buy 187,000 acres of U.S. Sugar Corp.'s lands, Congressman Tim Mahoney issued this news statement:

"The State of Florida's decision to have South Florida Water Management purchase 187,000 acres of land owned by U.S. Sugar Corp. holds the promise of taking a major step towards Everglades restoration. Converting this farmland into filter marshes will mean a greater and cleaner flow of water into the Everglades, lessening the need to use the Caloosahatchee and St Lucie Rivers as runoff. It will improve our estuaries and help our coastal communities. Today's decision provides an important complement to Congress' recent passage of the Water Resources Development Act (WRDA), which has finally positioned the Federal Government to live up to its promise to help fund Everglades restoration. Furthermore, Everglades restoration is critical for South Florida's economic development as it will provide fresh water for our region.

Since coming to Congress, one of my top priorities has been to create jobs with a future for rural Florida around Lake Okeechobee. While all Floridians applaud this bold move to restore the Everglades, we must recognize our responsibility to the tens of thousands of people of Hendry, Palm Beach and Glades Counties. A comprehensive economic development plan must be developed immediately to ensure that these communities do not suffer. I call on Governor Crist to lay out his transition plan and I commit to working with the Governor to secure a bright future for the affected families living in some of our most economically challenged communities."

5 comments:

  1. Anonymous5:03 PM

    I do not trust anybody out here!!!
    US Sugar is too happy. 1.7 billion for having polluted for decades sounds like a prize. It should be the other way around.-nail them to the EPA trophy wall.
    The money the Government gives them yearly goes in part for the same politician's campaigns- check the contribution records.
    I hope that this is indeed a "good thing".
    One thing is sure- we need to stop industry from getting away with polluting and contaminating with impunity while they pay off polititions with campaign contributions.

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  2. Anonymous10:27 AM

    This is absolutely amazing. The entire problem as a catalyst is these sugar companies who while not solely being the source of the issue, are a large part of the issue. Now here comes good ol Charlie buying out the team, while Coker and Buker laugh all the way to the bank. Now we as taxpayers not only front that cost, now we will expend funds to clean up that mess, if it can ever be cleaned up.

    As far as the State taking control of the refinery and Citrus processing, what else would you do with it? These other cane farms, and citrus growers are going to have to have an outlet.

    This is so amazing that people in our governments think that we are so blind and stupid, as to even portray this as historic. Historic robbery.

    Charlie sure is a Cheshire Cat these days. Besides changing colors, he can even disappear. It is truly amazing when someone dangles a carrot in front of him on the McCain level that he gets totally stupid, and throws out everything he originally campaigned for.

    I like the EPA Trophy wall idea better, as well as throwing Charlie to the dogs.

    Bottomline is we all will take it again in our taxes.

    When is government going to wake up and realize that the rest of the country is in a recession and impeding depression?

    They havent got a clue. Morons.

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  3. sherry11:19 PM

    To everyone that thinks this is a Great thing..You are unaware of the people that this is going to hurt. Would you like being laid off if you worked with a company for 30 or 40 years...NO, I don't think so. Most of these people will have to move away from their home town...What is wrong with home grown? One day there won't be any jobs left in the United States... already getting alot from other countries...we need to buy everything that says Made in the USA and we need to grow everything in the USA....but now US Sugar won't be able to do that anymore...so go be HAPPY....I hope one day all the people that are so happy will loose their jobs...

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  4. Anonymous8:48 AM

    There is something else going on with this political move. Time will tell what this party is up to.

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  5. Anonymous12:40 AM

    Although I feel bad that people may loose their jobs. I feel that many of you should not have protected the polluter. You all should have planned for a realistic plan "b" in case that dirty nasty plant was shut down one day instead of driving away everybody that complained about the pollution and other issues. Some of these people that actually liked being able to breathe may have been key to bringing your area a stable future if not for the stink and pollution. Did you really think they could just keep burning, stinking up the place, and contaminating the environment forever?
    I have a question... what have you all done with all the money that you have made for all these years, the cost of living in hendry county has been quite affordable and many should have their properties paid off by now leaving what should be very low monthly expenses considering most properties were well undervalued when bought years ago.
    You folks are like infants crying for a bottle. Big bad mommy dirty plant don't love you any more. I do understand the alleged share bit was a shame for you all but the closing of the plant bit well in the future happens in many industries sometimes with same day notice, out of biz, doors shut , here's your last check- see ya...
    You never should have put all your eggs in one dirty, smoking, stinking, polluting basket.

    Welcome to the world! It's a big bad world out there deal with it.

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